As rates of construction continue to climb and new competitors enter the landscape, senior living development has become a game that providers must approach carefully in order to capture market share and ultimately drive revenue.
For some of the industry’s experienced players, this means creating a game plan to differentiate their product and maintain a strong presence within their respective communities.
But the first step in doing so, some say, is to embrace the competition, rather than avoid it.
“For all of us that own or operate senior residences throughout the United States — it’s game time for competition,” said Ed Kenny, president and CEO of Des Moines, Iowa-based LCS, during the annual Assisted Living Federation of America (ALFA) conference in Tampa, Fla. this week. “We can’t have our cake and eat it too, and say we want to grow the senior services and expand our reach but then be spooked by competition. We have to accept the fact that it’s going to be a more competitive environment moving forward.”
Indeed it is. Currently, there are 12,000 independent living units under construction, which is four times the number of new units added last year, according to Ken Segarnick, chief corporate officer of national operator Brandywine Senior Living.
Additionally, there are 20,000 assisted living units under construction — not surprising, given that the rates of construction for these properties continues to climb, spurring concerns among industry members that some markets may be overheating.
“Right now we’re all building independent living and memory care, so the question is: How do you win the game?” said Stephanie Handelson, chief operating officer of Wellesley, Massachusetts-based Benchmark Senior Living.
With new companies, products and services emerging in the senior living space, some providers have devised strategies to beat the competition by using a multifaceted approach.
1. Differentiate or Expand Product Offerings
Senior living providers are turning to additional services beyond the norm in order to expand their market reach and differentiate their product.
Some have looked to home health care to address their biggest competitor — seniors’ homes — while others have rolled out new products that aim to deliver more care services in-house. Still others use third-party vendors to deliver these services while cutting costs in the process.
Finding an innovative way to expand product offerings will be a necessity for providers in the future if they want to “win the game,” some say.
“You either A) grow market share or B) … differentiate your products or expand your product offerings,” Handelson said. “How do you expand your market in a different way?”
For Kenny, flexibility is key.
“We’re going to have to see more flexibility in the service package and how we deliver our services,” Kenny said. “We have to recognize that we are part of the health care landscape and our clientele — that 84-year-old woman living in our community — we have an obligation to her, which is to help navigate the health care maze, whether with information, resources or services. And that’s going to be a real strong differential in our product.”
2. Deliver on the Resident and Staff Experience
Senior living is unquestionably a people business. It follows, then, that an emphasis must be placed on residents and staff members in order to maintain an edge over the competition.
“As an operator … it’s all about your ability to deliver on the resident experience,” Kenny said. “That’s what’s key — whether your asset is 10, 15 or 20 years old, if you’re the prime provider of delivering on that resident experience, you’re going to have a prime position in that marketplace.”
Family engagement is a huge piece of the business moving forward, he added. Additionally, staff training will be critical in order to keep valued employees from leaving to work for competitors.
“A lot of our good staff is being [sought after],” Handelson said. “We’re really working on associate engagement and making sure we don’t lose our people.”
3. Refresh Existing Products
Many senior living providers have re-evaluated their older, existing communities in an effort to revamp and reposition their products with an eye toward the future.
One such example is ACTS Retirement-Life Communities, which recently invested $300 million in its continuing care retirement community (CCRC) portfolio to do just that.
But investing a lot of money into communities isn’t always necessary in order to make them more appealing than the competition. In fact, some regular maintenance, coupled with the right staff members at each community, could make the difference for a family.
“Prepare yourself for the competition coming in,” Handelson said. “You should be taking care of your buildings. They don’t need to have all the bells and whistles but … [ours are] clean, warm and the [staff] we have in them are really what the adult children are buying.”
Written by Emily Study
Photo: Timber Ridge at Talus in Issaquah, Wash., an LCS community